Carrefour-Israel plans layoffs of 300 employees due to the transition to the Carrefour brand

The CEO of Carrefour Israel, Uri Kilstein, is leading a NIS 50 million streamlining process in the company. Kilstein's presentation to the company's managers held on Sunday indicates that the plan will include layoffs, closing branches, and changing suppliers.
The move is being made in a chain that is still branded under Beitan and Mega wines, in preparation for the transition to the Carrefour brand. The plan includes reducing the number of employees, currently numbering about four thousand, by 200-300 branch employees, most of whom are temporary workers and personnel workers. In addition, dozens of employees of the headquarters, which was significantly increased in the year in which Amit Zeev served as CEO, will be laid off. In the last year, Carrefour's headquarters expenses increased by 20%.
Kilstein began his position as CEO of Carrefour in July, and during that time he visited the various branches and decided on the closure of five of the company's branches, two large branches and three small ones. The boards of directors of Electra Consumers and Beitan Wines approved the move.
Last week the chain published the reports for the second quarter. The reports indicate that the segmental profit of Beitan Wines fell in the second quarter by 51% to NIS 5.2 million, following a 3% decrease in sales that amounted to NIS 711.8 million. This is a figure that reflects an annual sales rate of NIS 2.85 billion, which is approximately 8% of what the company predicted in the valuation it published six months ago. A more extreme gap is found in a segmental profit of about half a percent, while the company is expected, according to estimates, to end the year with a loss of about NIS 100 million.
Kilstein's efficiency plan also includes a commercial side where the chain will replace a substantial part of its suppliers. In the field of fresh products, meat, vegetables and pastries, most of the suppliers have already been replaced, while in the packaged products a revision is expected in the coming weeks.
Kilstein served as deputy CEO of Shufersal, and a year and a half ago he left for the Azrieli Group where he was appointed manager of shopping malls and online operations. He left a year later to compete for the position of CEO of Shufersal under the incoming chairman Itzik Abarkhan, but preferred to accept an offer from competitor Beitan-Carrefour .
Carrefour needs cash to convert the stores to Carrefour's standards, a move that requires renovation at a cost of millions of shekels per year per branch. The chain is in the process of renovating 10 branches, and plans to renovate 15 more branches. Three branches are already working with the chain's new standards.
Despite the move, it is still not clear when the chain's first store will open, and the company is not ready to commit to a date, since the opening is conditional on the presence of at least a thousand products from Carrefour's private label. Those close to the company stated that the Ministry of Economy is giving a boost to the activity of opening the chain stores, and removing the existing obstacles.
Beitan Wines has two bank loans in the amount of about half a billion shekels, which carry an interest rate of tens of millions of shekels per year. This burdens the company, which is also dealing with ongoing maintenance listed as an annual investment of approximately NIS 30 million in 150 branches, the equipment of which is mostly in poor condition and requires repairs and equipment replacements. In the background of all this, the decline in sales also continues. The second loan was intended to be used to renovate Bitan wine stores in preparation for their conversion to Carrefour, but according to estimates, part of the amount is already being used to finance current operations.
The Chairman of the Mega Wines Beitan Workers' Council, Eyal Eli, said: "The company's employees who are unionized in the Histadrut can be secure in their workplace and their livelihood. This is about the allocation of temporary workers, workers who have passed the retirement age and employees from the senior management staff. There is and will be no intention to harm any unionized worker in the Histadrut".